Job Cuts Coming at Union Planters

Union Planters Corp., which has struggled with deposit growth even after years of geographic expansion, will begin cutting some jobs as part of a continuing project aimed at wringing efficiencies out of its operations.

The $35 billion-asset Memphis banking company has, in fact, watched its total deposits decline in the last two years despite rapid-fire acquisitions that expanded its influence in the Southeast. To address concerns that the merger activity is driving away customers, the company has reorganized its senior management around three geographic regions and staff functions. The shuffle, announced late Monday, is actually part of a broader, companywide efficiency program, dubbed UPExcel, that will lead to unspecified job cuts during the second half of the year, according to Jackson W. Moore, chairman and chief executive officer.

The efficiency program is focusing attention on the companys financial services unit, which includes brokerage, investment, management, private banking, annuity product sales, insurance, and trust. Mr. Moore named Alan W. Kennebeck, a close lieutenant, as senior vice president and director of this group.

Mr. Kennebeck, who has been head of corporate administration and marketing, will focus all his efforts on growing noninterest income, Mr. Moore said in an interview late Monday.

In general, UPExcel is aimed at identifying opportunities to generate additional revenue and enhance client services, Mr. Moore said, adding that the company will have more details of the cost savings and job cuts in the third quarter, which starts in July. We have been back in the lab hard at work, he said. Now we are coming out with the development.

The new organizational structure will ensure the successful implementation of our program, he added. It is an evolutionary process.

Analysts said they expect only limited job cuts because the company is trying to improve service, which would be difficult to achieve while imposing massive, morale-busting layoffs.

The program is being run by Robert S. Duncan, who was named senior executive vice president and head of administration, legal, and special projects in the management reorganization. Mr. Duncan will also oversee merger and acquisition activities, Mr. Moore said, signaling that the company may not have put its acquisition days behind it.

To be sure, some of Union Planters troubles are beyond its control. David Trone, an analyst at Prudential Securities, said the company is in a challenging revenue environment because the bulk of its operations are in rural markets in such states as Tennessee, Indiana, Iowa, and Illinois.

Still, the company has made 20 acquisitions in the past five years, and analysts said some attention to customer service may have been diverted in the frenzy to integrate operations and cut redundancies. Analysts pointed to the trend in deposits as evidence of that. Deposits grew from $11.5 billion in 1996 to a peak of $24.9 billion in 1998 but then tapered off, ending last year at $23.1 billion.

The company has continued to struggle with new business generation, said Charles Ernst, an analyst at Putnam Lovell Securities Inc. When you do that many deals, it is hard to remain focused on the customer, he said.

Mr. Trone agreed. The focus wasnt on organic revenue growth, he said. It was instead on the cost side, consolidating systems and the back office.

There have been other major distractions. Mr. Moore took over as chief executive last September after the unexpected death of his longtime mentor, Benjamin W. Rawlins, who through 16 years of acquisitions took the company from a troubled $2 billion-asset regional bank to a sprawling southeastern institution with branches in 12 states.

The new executive management committee, announced late Monday afternoon, will report to Mr. Moore. It includes Mr. Kennebeck and Mr. Duncan as well as:

 Adolfo Henriques, named chief executive of the southern banking group and head of commercial lending. He will oversee markets in Florida, Louisiana, and Texas and will also be in charge of corporate and small-business lending, cash management services, and international banking.

 Steven J. Schenck, named chief executive of Midwest banking and head of retail banking. Mr. Schenck will be based in Indianapolis and oversee the Illinois, Indiana, Iowa, and Missouri markets.

 John V. White, appointed chief executive of the central banking group, which includes markets in Alabama, Arkansas, Kentucky, Mississippi, and Tennessee.

 Lou Ann Poynter, appointed senior executive vice president and head of mortgage banking. She will work from Hattiesburg, Miss., home of the companys mortgage center.

 Michael B. Russell, head of risk management and asset quality. He was also named a senior executive vice president and will be responsible for credit policy, loan review, compliance, and audit and data security.

 Bobby L. Doxey, chief financial officer, given responsibility for the financial group and corporate support, which includes technology and operations, human resources, government affairs, and investor relations.

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